Owens v. Williams, 130 N.C. 165 (1902)

April 15, 1902 · Supreme Court of North Carolina
130 N.C. 165


(Filed April 15, 1902.)

1. TRUSTS — Parol—Frauds, Statute of.

Trusts may be created by parol, as the statute of frauds does not apply thereto.

2. TRUSTS — Trustee.

Where land is conveyed in pursuance of an agreement that grantee hold it for another, he becomes a trustee, whether the agreement is made at the time of or before the conveyance.

3. TRUSTS — Consideration.

Where land is held in trust to be conveyed upon payment of purchase-money and other indebtedness, that such indebtedness was included in the consideration does not affect the trust.

4. TRUSTS — Limitations of Actions — Express Trusts.

The statute of limitations does not run against an express trust.

5. TRUSTS — Rents.

A person holding land under a pai'ol trust to convey is liable for rents and profits.

6. TRUSTS — Parties—Deeds.

Where parties to whom realty has been conveyed in violation of a trust are parties to a suit to compel a conveyance to the cesUii gue trust, their conveyance may be declared void and a conveyance pursuant to the trust enforced.

Douglas, J., dissenting.

Acttok by T. E. Owens and others against Edward Williams and others, beard by Judge O. II. Allen and a jury, at September Term, 1901, of the Superior Court SampsoN County. From a judgment for the plaintiffs, the defendants appealed.

*166 F. E. Cooper and. Geo. E. Butler, for the plaintiffs.

Faison & Grady, and Shepherd & Shepherd, for tbe defendants.

Furches, C. J.

This is an action to declare and enforce a parol trust. The record discloses the following facts:

In December, 1886, the land in controversy was sold under execution, as the property of E. B. Owens, by the Sheriff of Sampson County, when Henry E. Faison, became the purchaser at the price of $150, this being the amount of the judgment under which it was sold. Faison manifested a willingness to reconvey the land to Owens upon the payment to him of the amount ho had paid, to-wit, $150. But Owens, not having the money to redeem his land, applied to the defendant, Edward Williams, who was his son-in-law, to redeem it for him, and to1 take the title thereto from Faison and hold the same until he (Owens), could repay him, when he would reconvey to Owens. Owens, it seems, had been the guardian of his daughter, the wife of the defendant, Edward Williams, and still owed something on said guardianship; and the defendant Williams agreed to redeem the land from Faison as requested by his father-in-law, and hold the title until his father-in-law should pay him the $150 paid Faison, and the balance due on the guardianship’ of his wife, and he was to convey to Owens when these were paid; with the further provision that if Owens did not repay the said $150 and balance due on the guardianship', the defendant Williams should convey the land to his children, who were also the children of his said wife', and the grandchildren of E. B. Owens. Williams paid the $150 to Faison under this agreement and took a deed from Faison for the land, which is shown to have been worth between $1,250 and $3,000 at that time. E. B. Owens rer-mained in the possession and enjoyment of this land until his death, in June’, 1890, and after his death the plaintiffs went *167into possession thereof, and so remained until 1896, when the defendant took possession and afterwards put the other defendants in possession of the land, who still hold and occupy the same, and to whom he afterwards made a deed.

The defendant Williams testified that said deed was dated January, 1900, registered September 11, 1900, and was without consideration. And the case states that “about January, 1900, the plaintiffs requested said Williams to render an account of the rents and profits of said land and permit them to pay any balance that might be due him, and for him to recon-vev said land to the heirs of E. B. Owens. The defendant Edward Williams failing to do this, the plaintiffs thereupon offered to repay him the entire amount due, interest and costs, and ask that he reconvey to them said land, which the defendant refused to do,” and this action was commenced in September thereafter. The following issues were submitted to the jury and found as indicated:

1. Was there a parol agreement between Edward Williams and E. B. Owens that Williams would buy the land, and that Owens might redeem it? Yes.
2. Was it agreed between them that Owens was to repay the purchase-money? Yes.
3. Was it agreed that Owens was also to pay the amount he owed Williams’ wife, Mary Alice, as guardian? Yes.
4. Was it agreed that if Owens failed to redeem that Williams was to make a deed to the children of said wife? Yes.
5. If so, has Williams executed a deed to said children accordingly? Yes.
6. Was any time mentioned within which Owens might redeem, said land ? No.
7. Did the defendant Williams ever demand 1 ho purchase-money or any other amount from Owens ? No.
8. Did said Owens or his heirs ever refuse to pay the purchase-money or any other amount? No.
*1689. Is .plaintiffs’ cause of action barred by the statute of limitations ? No.

Upon the facts of the case and the issues found by the jury, his Honor held that the defendant Williams was a trustee.for the benefit of the heirs of E. B. Owens, and upon his being paid the purchase-money and interest and the amount that E. B. Owens was due defendant’s wife, Mary Alice, as her guardian, that he should convey said lands to' the heirs-at-law of the said E. B. Owens. His Honor further held that the defendant Williams was liable to account for the rents and pirofits of said land, since he took possession of the same in 1S96; and the same, or a.sufficient amount thereof, should be applied to the repayment of the purchase-money and the amount E. B. Owens owed Mary Alice as her guardian. And for the purpose of ascertaining the amount due the defendant Williams, as purchase-money paid Faison, and the amount due Mary Alice as guardian, and the amount and valué of rents and profits of said land, since the defendant took possession in 1896, referred the case to O. E. McOullen, to take and state an account. From, this judgment the defendants appealed.

We see uo error. As the Statute of Frauds does not apply to the declaration of trusts, they may be in parol. Shelton v. Shelton, 58 N. C., 292; Riggs v. Swan, 59 N. C., 118. And where one person buys land under an agreement to do so and to hold it for another until he repays the purchase-money, the purchaser becomes a trustee for the party for whom he purchased the land. Cobb v. Edwards, 117 N. C., 244.

Wherever land is conveyed to one party under an agreement that he is to hold it for another, he becames a trastee, whether this agreement is made at the time of the conveyance or is made before, and the land is conveyed in pursuance of said agreement. This is an express trust and an equitable estate. Holden v. Strickland, 116 N. C., 185.

*169As tbe Statute of Frauds does not apply to tbe declaration of trusts in tbis State, whenever tbe terms of tbe parol trust are esablisbed, tbey bave tbe same force and binding effect as if tbey bad been in writing. So, tbe facts found in tbe case, going to establish the trust, bave the same binding effect upon the defendant as if tbey bad been incorporated in tbe deed from Faison to tbe defendant. And bad tbis been done, it seems to us there could be no ground upon which tbe defendant could dispute tbe trust.

The fact that Owens was to pay tbe defendant Williams a debt be owed bis wife, in addition to tbe purchase-money paid Faison, made no difference. Tbis point was involved in tbe ease of Crudup v. Thomas, 126 N. C., 333, where the pur-ebaser, Crudup, was to be paid a debt due him, in addition to the purchase-money; and tbe Court held that be was a trustee for the benefit of bis brother for whom be bought, and only held the legal title as security for tbe prirchase-money and the amount his brother owed him, and upon tbis being paid, he was compelled to convey; and, as bis brother did not redeem the land before bis death, that he as the cestui que trust bad such an estate in said land as bis creditors might enforce by having tbe land sold, and‘the proceeds first applied to the discharge of the purchase-money and the amount due Crudup, outside of the purchase-money, by his brother, and the residue applied to the debts of the party for whom the land was bought.

As tbis is an express trust, we do' not think the Statute of Limitations runs; and especially is this so, when E. B. Owens and tbe plaintiffs remained in possession of said land until 1896.

.But it is contended that if tbe defendant Williams is a trustee, be is not liable for the vents and profits since be took possession in 1896. We think differently. lie occupies the position of a mortgagee in possession. Crudup v. Thomas, *170 supra; White v. Jones, 88 N. C., 166; Pearsall v. Meares, 64 N. C., 549; Wellborn v. Simonton, 88 N. C., 266. And as it is elementary learning, and lias been so often held, that a mortgagee in possession is liable for rents and profits, we will cite no authorities to sustain, the position that he is so liable.

.But it is further contended that if he is liable for what time he occupied the land, he is not liable for the time the other defendants have been in possession. It does not clearly appear from the case how long the defendant. Williams occupied the land himself, but this makes no difference, as it does appear that he took possession in 1896, and that he put the other defendants in possession, and has since executed a deed to them. This made him liable for rents and profits, as is expressly decided in White v. Jones, supra.

But it is further contended that the defendant Williams has made the other defendants a deed, and can not now make or be compelled to make a deed to the heirs of E. B. Owens. But the parties to whom this deed was made are parties to this action, and it is shown and admitted that said deed was not made, until the plaintiffs offered to pay him the purchase-money and whatever E. B. Owens owed Mary Alice as guardian, and it is admitted to have been made without consideration. It is, therefore, void as to the plaintiffs, and should be so declared in the judgment in this case, and with this addition to the judgment appealed from, the same is


Dch'olak, I., dissenting.